A.M. Best removes Aviva Canada ratings from under review

A.M. Best Company has removed ratings of Aviva Canada and its affiliates from under review and affirmed its financial strength rating of “A,” or excellent, after the insurer’s parent company has shown improving risk adjusted capitalization.

A.M. Best maintained Aviva Canada’s under review status in June because of strategic evaluation and management changes of its United Kingdom parent company, Aviva plc, and its businesses.

The ratings agency has also affirmed Aviva Canada’s issuer credit rating of “a+.” While the outlook for its FSR is stable, A.M. Best has a negative outlook for the company’s ICR.

The company says “the execution risks associated with Aviva plc’s plan to exit or restructure some business segments is high in the current economic environment, since the group is likely to experience temporary pressure in earnings and the full results of the plan are not expected to be seen before the end of 2014,” it noted in a statement. It also said Aviva’s extension of its debt de-leveraging timetable also contributed to the negative outlook.

Aviva Canada’s affiliates include Elite Insurance Company, Traders General Insurance Company, Pilot Insurance Company, Scottish & York Insurance Company, Limited and S&Y Insurance Company.